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Critically Evaluate The Influence Of Stakeholders Commerce Essay

With the terms of economic growth, the competition environments of corporations have significant change. More and more individuals and groups pay attention on the social responsibilities, and social responsibilities are also reflected in the concept of business. Many stakeholders encourage corporations to assume more responsibilities. They encourage corporations to make good relationships between corporate growth and social responsibilities. Many traditional enterprises expand the scale of operation and make maximize of interests for the shareholders, so that they ignore their social responsibilities, such as environmental pollution, the deterioration of labor conditions, and poor quality of products or services. Enterprises have the responsibility to become good “Corporation Citizen”. In other word, they should do “right things” within their business practices. Corporations need to assume their responsibilities in the society and they also need to improve and strengthen their ways of managing in the corporate responsibilities, so that they can protect their reputation and reduce risk.

This report will evaluate what the corporate responsibilities are, what the stakeholders have any influences on the business responsibilities, and how they encourage the business practices. In this report, corporate social responsibilities are main performance on their corporate image, so that they can have sustainable development.

Corporate responsibility

With the developing of corporate responsibility, some studies make different definitions on the Corporate Social Responsibility (CSR). In addition, Civil Social Organizations make different code of ethics to evaluate the corporate responsibilities. The studies have different aspects to explain CSR. The Confederation of British Industry’s definition is

“CSR requires companies to acknowledge that they should be publicly accountable not only for their financial performance but also for their social environmental record.”

(Blowfield & Murray 2011: 8, Box 1.1)

Corporate Social Responsibility (CSR) is that enterprises want to get maximize profits or the process of operation, and at the same time they need to assume responsibilities of all the stakeholders. Therefore, they can get the ability of sustainable development not only in the economic term, but also in the field of society or environment.

Business is through some charitable activities and decisions to improve their images, to strengthen their brands, to motivate their employees, and even to push up the share price of the firm. Therefore, the business can be growth sustainably, in other words, CSR can support corporations’ sustainable development. Corporate responsibility is sure corporations can sustainable development within three situations of corporation, society and environment. Therefore, business will consider three perspectives that are environment, economy and society, and then they can get “Triple Bottom Line” (TLB) that is coined by John Elkington (Crane & Matten 2010: 34). In the term of TLB, the corporations do not have a single goal to have the economic values, at the same time they also want to get the environmental and social values with the sustainable growth in the long term. All the corporations are profit organizations, and they are not nonprofit charitable organizations. Therefore, to get maximization profits is their importance goals and achievement, when they make the goal of corporate responsibility.

More and more Multi-National Corporations make the corporate responsible to become the first issues in their operating. Corporations converted their actions from passive social obligations to take the initiative to fulfill social responsibility. Some corporations make the responsible actions as corporate mission or part of strategy to get their values. For example, The Body Shop started the company with the attention of ethics, and it also gets the better image than other competitors of this industry. The Body Shop Foundation represents the good image to their stakeholders. Furthermore, some corporations make their responsible actions to meet customer needs. Corporations set up corporate image and brand from fulfilling CSR, because they need to satisfy customers, to attract more employees and more long-term investment form shareholders, and to forestall legislation. In addition to that, they need to solve their social problems what they cause, they can bring some social impacts through their activities, and they need to have the contribution of stakeholders in society. Therefore, corporations fulfill social responsibility to become the important ways which can increase the ability of competition and achieve sustainable growth. More practices have proved if companies want to become stronger and bigger, they must assume their social responsibilities actively.

Society and business are interdependent, society needs business, and business also needs society. Society wants to get employment and wages for citizens, investment and innovation for the local community, and profits and taxes for the government from business. Correspondingly, business needs legal protection, creating demand, and public assets and infrastructure, which they can get from society.

Activities of corporate responsibilities

Corporate responsibilities can show that corporations actively participate in the donations and social charitable undertakings. On a voluntary basis, corporations take the initiative to contribute to the community, donations. In the construction of public infrastructure, corporations set up schools, hospitals, and nursing homes. Moreover, they can establish scholarships and charitable funds. In addition, corporations have the performances on the protecting environment. They can reduce the pollution and waste of energy or natural sources to achieve sustainable development. For the consumers, shareholders, competitors and suppliers, the corporations need to have good faith, in particular to strengthen the responsibility of consumers, that they can protect the safety of consumption products, and accept the supervision of the consumers to protect the interests of consumers. For the employees, corporations can provide a safe and rewarding job, and improve working environment. Corporations also can support some government’s activities and abide by the law as their corporate responsibility.

Stakeholders encourage responsible business practices

A stakeholder of an organization is “… any group or individual who can affect or is affected by, the achievement of the organization’s objectives”.

(Freeman 1984: 46)

The model of stakeholders can include shareholders, employees, consumers, suppliers, competitors, civil society organizations, and government (Carne & Matten 2010: 63, Figure 2.3.). Normally, these stakeholders will have links with each other. Governments make the rules for corporations to protect the rights of employees, consumers, shareholders, and suppliers. Moreover, they have the common viewport to watch the corporation that is their corporate image. Good corporate image and brand can bring the reputation and reduce risk, and it can attract more groups and individuals to support and protect them. Sometimes, more attention can represent good business performance.

The stakeholders will impact on the decision of CSR. Before the corporations make some decisions on the corporate responsibilities, the corporations will analyze and evaluate the interests of stakeholders and they can get the interests from these series of actions. The corporations will find the scope of the social and environmental duties, and then they will report their strategy and plan of their responsibility to the external group or individual.

Some Civil Social Organizations can encourage the responsible business practices, for example FTSE4Good Indices, that it will provide some corporations’ performance. FTSE4Good Indices can affect decisions of investors. Therefore, many corporation need to have the good performance of CSR.

M&S Plan A is a report on their strategy of CSR, and they decide to carry out their plan form the year of 2007, because of the growing population, changing climate, and less raw materials. M&S recognized that the corporation’s sustainable development not only depends on good management of business, it will depend on the responsibility of their stakeholders. (A video of M&S Plan A)

Next part will give two examples that are consumers and government and local community as a stakeholder to encourage the responsible corporate practices.

Consumers as a stakeholder

For the corporations, consumers are the important stakeholders of business. Corporations do all the activities or actions for their brand and corporate image, so that they can attract more consumers to buy their goods or services. The quantities of consumers will represent the market share in the competitive environment. Therefore, they can continue to develop and operate the corporations. Some business actions will give the confidence to the consumers. In the CSR, corporations need to protect the consumer rights. Consumers need to more than value for money, good quality of products, and sustainable products. In addition, Consumers pay attention on the “Greenness”, because living environment become worse and worse. Consumers need to have healthy life; therefore more consumers want to buy “green” products. The corporations in order to satisfy the demand of consumers, they produce “green”. The corporations need to make sure all the goods or services are fair and honest. If the corporations cannot provide the good quality of products, the consumers will think its brand is not good and it also can bring the bad influences. Some bad qualities of products will lead to death, after the consumers use. Therefore, it will damage to the image of the corporations and it also can bring the crisis of business. Consumers do refuse to buy the products from non-responsible corporations, so that the corporations cannot continue to operate and grow.

Government and local community as a stakeholder

The corporations need to fulfill the responsibilities of protecting environment and sustainable development. They also need to strengthen to protect natural environment and reduce the waste of energy resources, so that they can increase the ability of sustainable growth. Government and local community will encourage the corporate to assume energy conservation and environmental protection responsibility through financial and taxation incentive.

Government and local community can protect the business, and they also can restrict some business practices. Government often uses taxation to encourage the responsible corporate practices. Many governments and local communities are paying attention on the environment. Environment and resources are the serious issues for any individuals or groups. Governments make some taxation on the environmental pollution. If the corporation of toxic emissions will exceed the standards how many the government requires, the corporation will pay the taxes to government. Material resources are less and less, some resources are non-renewable, such as oil. Oil is a non-renewable resource for the energy, so that some government will restrict corporations to exploit petroleum. Therefore, the corporations have to exploit new power, such as water power or wind power. These business practices not only support the policy of government, but also can reduce cost. P&G use 100% renewable energy sources, and it also can reduce the CO2 emissions. In addition, some corporations’ products will pollute the environment, such as plastic packages. Government will restrict the percent of landfill for a corporation. For example, P&G plan to “have zero consumer waste to landfill”, that it means all the packages of their products are recycling.

In addition, some governments will provide the policy of cutting taxation for the corporations. If the corporations can do some charitable undertaking and contributions, the government will cut their tax according to their activities. The corporations think it is good way to support CSR, because that not only reduce the cost, but also can strengthen the corporate image.

Conclusion

Corporation is a part of society, so that society depends on business to develop, and at the same time development of business need good society of environment. As the corporations get the maximization of profits and benefits, the society also can get interests. The corporation is an individual in the society, but all the stakeholders in the society are a group. When the corporations consider the economic area, at the same time they also need to consider the field of society and environment. As the corporations get the maximization of profits and benefits, they also need to concern on the duties of society and environment. Corporations have the responsibilities of the economy from their shareholders, and they also need to assume the responsibilities from employees, consumers, suppliers, competitors, civil society organizations, and governments. All the stakeholders can affect the responsible corporate practices, because the corporations need to protect their reputation and keep to grow. If the corporations want to develop sustainably, it is more important to do the responsible business practices. With the changing of climate and increasing of populations, all the stakeholders pay more attention on the environment. Greenness Corporation represent that it is a good corporate citizen. After the corporations have the good image, they can attract more employees, consumers, investors, and get more support from government and other organizations. Therefore, Corporate Social Responsibility is important to develop business.

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